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Sales Tax Act (III of 1951)-----Ss. 3 & 7--Constitution of Pakistan (1973), Art. 185<3)-­Notifications No.666(1)/81, dated 25-6-1981, Item No.38, No.579(1)/83, dated 11-6-1983 and No.580(17)/83 dated 11-6-1983--Exemption from sales tax--Fabrics of man-made fibre--Leave to appeal granted to consider submissions that according to departmental practice when it was proposed to levy duty, even at reduced rate, on any goods which were previously exempt, provision regarding exemption was formally deleted by notification and thereafter a new notification was issued imposing levy at the reduced rate; that although carpets were included in expression "fabrics of man-made fibre" which were exempt from sales tax by virtue of Item No.38 in Notification No.666/81 but .this item had not been deleted and was still intact in notification No. 579 dated 11-6-1983, and that despite issuance of Notification No. 580 (1)/83 whereby machine made carpets had been made leviable to duty, the exemption already allowed under Notification No.666 of 1981 would continue to rule the field and would not cease to be operative. ORDER NASIM HASAN SHAH, J.-- The relevant facts are that the petitioner is a manufacturer of carpets and rugs of man-made fibre. Under section 3 of the Sales Tax Act, 1958 a sale tax is leviable on all goods manufactured in Pakistan at the rate of 12 ½ of the value of goods. However, the Federal Government has the power by notification under section 7 to exempt any goods from the sale tax or to make a reduction in the rate of sale tax leviable in respect of any goods. Accordingly, the Federal Government issued a notification No.666 (1)/81 dated 25-6-1981 whereby goods as specified in the table subjoined to the notification were exempted from sale tax. By virtue of item No.38 of the said table exemption from tax was made applicable to the fabrics of man-made fibre and carpets manufactured by the petitioner were treated as covered by the said item 38 and the same were allowed exemption. Simultaneously with the above notification another notification No. 667 (1)/81, dated 25-6-1981 was issued whereby sale tax was reduced in respect of goods mentioned therein under…

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